THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, HOST: Thanks Wolf and good evening everyone. You know Sarah Palin likes to mock what she calls the lame-stream media, but in interviews with "The New York Times" and "ABC News" about as mainstream as you can get, she inches closer tonight to a 2012 presidential run.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: If you ran for president, could you beat Barack Obama?

SARAH PALIN (R), FORMER GOVERNOR OF ALASKA: I believe so.

(END VIDEO CLIP)

KING: Also tonight, a Republican governor who, not too long ago, was near the top of any 2012 prospects list until what his staff said was a long hike in the mountains turned out to be a secret trip to see his mistress in Argentina. Governor Mark Sanford joins us live.

And why don't the normal rules apply here in Washington, you know when a company struggles, the CEO gets the ax and the manager or the coach is usually the first to go when a sports team falters. So is it smart or foolish for the Democrats to keep Nancy Pelosi and the rest of their congressional leadership team in place as is after devastating midterm election losses?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think we missed an opportunity today. To send a signal to America that we understand what happened this past election.

(END VIDEO CLIP)

KING: Now, we were planning to begin right there, with the debate about the Democrats and their future. But then came this 2012 tease.

(BEGIN VIDEO CLIP)

PALIN: I'm looking at the lay of the land now, and trying to figure that out, if it's a good thing for the country, for the discourse, for my family, if it's a good thing. UNIDENTIFIED FEMALE: If you ran for president, could you beat Barack Obama?

PALIN: I believe so.

(END VIDEO CLIP)

KING: Can she? Democratic pollster Cornell Belcher is with us, along with our senior congressional correspondent Dana Bash, also CNN contributors Erick Erickson and John Avlon and our national political correspondent Jessica Yellin who's out in San Diego with more than a few GOP governors who wonder whether Palin is blocking their path to the Republican nomination.

She just said, Cornell Belcher, she believes she can beat Barack Obama. You're the Democratic pollster in the room. You've worked with the Obama White House. Can she?

CORNELL BELCHER, DEMOCRATIC POLLSTER: Well, lame-stream media, I think we're putting the cart before the horse (INAUDIBLE) because there's a lot of Republicans out there. First she has got to beat the Republican establishment because like you said there's a lot of Republican governors out there who quite frankly are afraid of her.

And she clearly is sort of the anti-establishment candidate. I think what they've got to be mindful of, is she raised heck in the Republican primaries this season. So you can't bet against her in the Republican primaries and knocking over the establishment. However, she has -- she will enter that race against Barack Obama with some of the highest negatives of any candidate.

KING: If she gets there. Jessica Yellin, I want to go to you, but first I want to walk over to the wall because you're out at this Republican governors meeting out in San Diego and if you look at the map, a lot of the people at that meeting, successful governors from the red states, are running for president or at least we think so. Tim Pawlenty, the governor of Minnesota has clearly been moving around the country. He wants to run for president, no doubt about that.

Another potential governor, Mitch Daniels of Indiana. He likes to say that he has the fiscal conservative record that Washington could use. He's at that meeting. Governor Haley Barbour of Mississippi, a former chairman of the Republican National Committee, he told me recently he's looking real hard at it, wants to decide early in the New Year.

Another Republican governor you're with, Governor Rick Perry of Texas just won re-election. Some say, hmm, will the Texas governor run? There are others as well, Jessica Yellin, out at that meeting. As they size each other up, do they complain at all, say, wow, why does she keep talking about this, and do they view Sarah Palin as a speed bump or a bigger obstacle to the Republican nomination?

JESSICA YELLIN, CNN NATIONAL CORRESPONDENT: I think that Sarah Palin is the political third rail out here. You know when you ask people about her, they're very careful about how they answer. Nobody wants to explicitly say that they would support her for president. Nobody explicitly says they wouldn't. They just wish we wouldn't ask the question.

The bottom line is there are so many candidates, I should say governors-elect out here, who were endorsed by her, who basically are sitting where they are because she came out for them either in the primary or the general and gave her -- gave them their support. So there are a lot of people here, the new face, who owe Sarah Palin a lot.

But many of these presidential contenders who no doubt wish that she would take a lower profile or be less controversial for the party as a whole, as they're trying to rebrand this party, as very inclusive, she is a much more polarizing figure than many of the leadership would like her to be out here -- John.

KING: And Erick, when you hear Jess say, you know many of the others wish she would take a lower profile, maybe just to get out of the way for a few minutes, maybe to give them a chance to get some attention. She's doing just the opposite. She has that new show, "Sarah Palin's Alaska". She's on Facebook quite a bit and the social media and then as much as she says lame-stream media, you just saw that interview with Barbara Walters and very interestingly she is clearly analyzing her weaknesses and strengths.

This is what she told "The New York Times". There will be a Sunday magazine article this week. "I know that a hurdle I would have to cross that some other potential candidates wouldn't have to cross right out of the chute is proving my record. That's the most frustrating thing for me. It's been much more perplexing to me than where the lame-stream media has wanted to go about my personal life. And other candidates haven't faced these criticisms the way I have."

So clearly she's looking back at the 2008 campaign experience and then the criticism when she decided to resign as Alaska governor and clearly thinking, Erick Erickson, if she jumps in, first foray would be, I'm not who you think I am.

ERICK ERICKSON, CNN CONTRIBUTOR: I will support whoever the Republican nominee is. You know, she's --

(CROSSTALK)

KING: -- new secretary of state Erick Erickson, where did this come from?

ERICKSON: Absolutely. You know she's got some hurdles to overcome. She really does and a lot of these governors very much would like her to exit the stage for a little while, to let them get some traction. She's not going to. But, you know, a lot of people back in 2008 said that the Republicans could not win in 2010, and yet they did.

And a lot of people in 2010 are saying Sarah Palin can't win in 2012. I'm not so sure. I mean, heck -- I mean her followers are getting Bristol Palin into the finals on "Dancing with the Stars," anything is possible.

(CROSSTALK)

KING: Go ahead.

JOHN AVLON, CNN CONTRIBUTOR: I'm not sure that's the right barometer, obviously. Look, I mean first of all, she does suck up all the oxygen out of the room. And even people who are beating her in the polls like Mike Huckabee and Mitt Romney have a hard time getting press attention because she's such a media force. But let's look at the numbers.

She's not only polarizing the American people. And, in fact, one poll showed only a quarter of Americans think she's qualified to be president. But even among Republicans and Tea Party supporters, her base, many of the folks who really love her, on April 2010 poll found that over 40 percent of self-identified Tea Party supporters did not think she was qualified for president and would not support her. That is a deeply polarizing thing even in the Republican conservative base --

ERICKSON: She's never been led by the polls and I don't think she's going to start being led by the polls. If there's one thing about Sarah Palin, she certainly goes off and generally does her own thing which drives a lot of pundits and a lot of people on her own staff crazy but it gets her attention.

KING: I'm trying -- what I'm trying to figure out, and it's a mystery to me really, is whether she's doing this because she loves the spotlight or she's doing this as a calculated strategy. John just used the term "sucks up all the oxygen."

Dana, I took a trip with Mark Warner. He's a senator from Virginia. He was the governor of Virginia before that. Late in 2007, he went up to test the waters in New Hampshire. A credible presidential candidate, a very successful businessman, a governor from what then was a red state. A guy who thought the Democrats needed to move a little bit to the middle.

He could raise the money, but he got up there and he said Obama, Hillary Clinton, a little bit of John Edwards, he said there was no oxygen left in the room -- no room to maneuver and said forget about it, I'm not going to run. Is Sarah Palin trying to take up so much oxygen to keep the lesser knowns out?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Is she trying to do it -- unclear. Is that the result of what she's doing? It could certainly be. I talked to somebody who is considering running in 2012 today, who said that he's not really sure if the calendar is the way they thought it was even just a couple of weeks ago, in that, you know, unlike four years ago, many of these candidates were waiting and they thought you know what, because the electorate is so unsure. We're going to wait a little bit longer than we have in the past, but now that Sarah Palin is doing this, not so sure that others feel that they can do that any more. BELCHER: Very quickly, can I say this? I mean, as a Democrat, I got to tell you, looking at what she did in the primaries is remarkable coming from outside. And Erick, I got to ask, you know I think she speaks to the energized base in the party that none of those other mainstream Republican candidates do. I find it hard to bet against her.

ERICKSON: Yes, you know, Cornell, I think you're absolutely right. She has tapped into something that really -- you know everyone uses the Reagan comparison and it's so overdone. But if you go back to '76, he didn't beat Gerald Ford, but he was able to tap into something that no one quite understood. And she's doing the same thing. I'm not sure she's tapping into the exact same thing but it's something people don't quite understand right now.

AVLON: Nobody should doubt how beloved Sarah Palin is by her supporters. But notice that the Democrat is the one saying sort of subtlety pushing her candidacy on this panel here.

(LAUGHTER)

ERICKSON: Yes, a lot of Republicans pushed Barack Obama in 2008.

KING: Here's another factor in all of this because some people have gamed this out, looking at Sarah Palin through the 2008 exit polls, what we knew about her after the 2008 campaign, and talked about, well, you know maybe she couldn't win one on one with Barack Obama, but what if we had a third candidate or a fourth candidate, would that make a difference? And one of the most talked about potential Independent candidates, the New York City Mayor Michael Bloomberg said this yesterday at a conference sponsored by "The Wall Street Journal".

You know many have thought is he going to try this? He says "party affiliate is so strong with enough people that the Republicans and the Democrats, no matter who their candidates were, no matter who voted would get enough votes that you could get every Independent vote it would still not be a majority."

Now, technically, John Avlon, you wouldn't need a majority, but Mike Bloomberg seems to be saying -- and we all know he's looked and studied this for a long time even as he said no, no, no. He seems to be saying I've looked hard enough to figure out I can't do it.

AVLON: I mean, that is -- that is a pretty, you know analytical mathematical statement. The real challenge for an Independent presidential candidate is the Electoral College. Strictly speaking, 37 percent of Americans identify as Independents. That would triumph in a three-way race. But Mike Bloomberg knows what he's talking about here. There have been studies on this and that's a pretty analytical and not quite sure (inaudible), but that's an informed statement of "I'm not interested, folks" from Mike Bloomberg.

KING: Let me get back to Jessica Yellin for a second. Who out there, Jessica, do people talk about? Forget Sarah Palin for a second. Who of those governors is working the hardest? YELLIN: Is working the hardest? I'll tell you the one who is really getting eyebrows raised out here is Nikki Haley. Her message when she -- she was among the first speakers, South Carolina governor- elect, a Tea Party candidate, backed by Sarah Palin who is where she is, she's one of those because of Sarah Palin's early support in the primary.

And her message, John, was, look, there is an empowered new voter out here who is a new dynamic in this country. It is a voter who is not Democrat or Republican, not necessarily political before this moment. And someone who just wants to see us do what we promised to do. And if we don't, they will change parties; they will change allegiances and keep us to our word.

And this is the kind of movement that you hear Tea Party activists talk about. And it's something that these governors here are really attuned to and trying to shift the party in that direction. But it's not clear that it's a party aligned energy. It's something that Nikki Haley seems very tapped into.

KING: And Jess, I'm just going to point this out, this is one of the things that drives the others crazy about Sarah Palin. As the Mitt Romney people would tell you, we endorsed her first.

(CROSSTALK)

KING: Her family gets all the credit for it --

YELLIN: Well --

KING: -- but that's the way -- that's the way life in politics --

ERICKSON: I endorsed her first --

(CROSSTALK)

KING: Erick Erickson -- President Erickson endorsed her first. Cornell, to Jess's point about though somebody like a new face, a Nikki Haley, now, Nikki Haley's not going to run for president in 2012, but do we think by the old rules, the standard rules all the time and we don't realize after an election like this, maybe it won't be somebody who's on the track right now?

BELCHER: No, I think that's absolutely right and I think that's sort of why some of these outside candidates have such a shot. Look Barack Obama was an outside candidate because voters were looking for change. After eight years of Bush, they really were looking for change. We just had an election that I would argue was still about change.

And I think the next election is going to be about change as well. So the candidate -- I mean, the ideal that you've got to have all this experience, we turned that on its head with Hillary Clinton. And I think that's going to continue to be the story. BASH: There's no question about it. I mean anything that we thought as political observers in the past, we should basically just throw out. I mean that's basically what the last election -- I'm serious and the election before that taught us.

KING: There are some Republicans who think Marco Rubio will run. There are some Republicans who think Rand Paul might run. So we will stay tuned and watch all of this play out and we will watch for the next hint from Sarah Palin. I'm going to continue to throw all this out.

Up next, the Democrats put down an eternal revolt and vote to stay the course with Nancy Pelosi as their leader. Plus, I sure wish Senator Jay Rockefeller had a Nielsen box.

(BEGIN VIDEO CLIP)

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: There's a little bug inside me which wants to get the FCC to say to FOX and to MSNBC out, off, end, good-bye. Be a big favor to political discourse our building to do our work here in Congress and to the American people to be able to talk with each other and have some face in their government and in their -- more importantly in their future.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: Nancy Pelosi was elected minority leader today, but not without some insurrection in the Democratic caucus. Some former supporters say it's time for a change. One of those defectors joins me now from Capitol Hill, Congressman Peter DeFazio of Oregon.

And Congressman, our group is still with us as well, but I want to read from the letter you and Marcy Kaptur sent to the leadership, said quote, "Following the loss of our majority we should fully understand the causes of our historic losses before we begin the process of rebuilding." Speaker Pelosi says it was not her, that it was the economy. You disagree.

REP. PETER DEFAZIO (D), OREGON: Well, it certainly was the economy, but we could have done a lot better by the economy. I think we planted the seeds of our failure by accepting the Obama-negotiated Senate stimulus bill which cut back on real investment, transportation, infrastructure, school building, education, things that would have really put people to work, would have provided benefits to future generations. For tax cuts that nobody knew they got that didn't put anybody to work.

The invisible Larry Summers tax cuts, bad politics, bad policy. We didn't push back hard enough in my opinion against the White House on a number of measures, and then going from there to cap and trade was a huge mistake. We should have been focused on the economy and on jobs. Your previous discussion there about experience, I -- you know, there's no one in the caucus who denies the experience of the speaker and the tremendous record she has. But the thing is, we're now not looking back, we're looking forward into a very changed world, the greatest majority losses in the House in more than half a century. I think we need to think about, you know, a different message coming out to the American people and saying, we got it. Here are some things we're going to do different, and here's our leadership team, as opposed to just, here's our leadership team.

KING: Who would you have made your leader in place of Nancy Pelosi? Who would be a better leader for the Democrats?

DEFAZIO: We wanted -- you know we have a lot of very talented people in our caucus, younger people in particular. And what we wanted to see -- what Marcy and I wanted was to give this all a chance to gestate. We just started to heal and understand in the last two days. Six-hour caucus yesterday mostly devoted to people who lost their races. And you know, and a lengthy discussion of our proposal today. We got 68 votes.

That's respectable. Not great, but respectable in the caucus. There is concern at a rush forward with the same leadership. We wanted to have a few weeks of discussion, bring in some people who could, you know, tell us about the results of the election, really parse into it, and then have people present to us their ideas on how we go forward. I don't even know who those people might have been. It might have been the current leadership. It could have been others.

KING: Stay with us. I want to continue the conversation with the group here because what you're arguing, Congressman, is that those compromises with the Senate that many would say moderated or made the legislation less liberal was what hurt the Democrats, and of course, Dana, you spoke to Allen Boyd today, one of the moderate Democrats, conservative Democrats who was defeated.

He argued just the opposite. And he told you by keeping Nancy Pelosi as the leader the Democrats will hurt themselves when it comes to candidate recruitment in much of the country in the next election. Let's listen to Congressman Boyd.

(BEGIN VIDEO CLIP)

REP. ALLEN BOYD (D), FLORIDA: I don't know how we go into these districts like the one that I represented, do represent now, will be giving up in January and recruit good moderate Democratic candidates if you have the same leadership team.

(END VIDEO CLIP)

KING: So there's disgruntlement with the current leadership from both ends, if you will, but still a debate in the party over what the lesson is to be learned.

BASH: Oh there's a big-time debate in the party over the lesson. And I think that's why Congressman DeFazio says hold on a second. Let's just give it a little more time to keep having that debate because it's an important thing and Allen Boyd is not alone. I think that is one of the most interesting arguments that I have heard against Nancy Pelosi, from those who were defeated and those who weren't, which is they're very -- they're looking ahead and they're looking into 2012 and they are very concerned that despite the prowess that Nancy Pelosi has in raising money, millions and millions of dollars, that they're not going to get the best people to try to take that back.

And one other point I would make, you know, the congressman said 68 votes is not that great, but I talked to -- I was out there with him and all the other members. A lot of people were pretty surprised that it was actually that high. This is a woman who ruled the caucus with an iron fist. That many people said effectively we want to hold off or not have you is pretty amazing.

KING: So what does that tell you, Cornell? You heard the congressman's dissatisfaction with the president and his team and their strategy. Obviously you can't replace the president in mid cycle, their dissatisfaction that maybe we need a change in leadership. Is the party making a mistake by not changing any of its leadership?

BELCHER: No. And let me tell you this, I think it's fundamentally what's happening to Leader Pelosi is fundamentally unfair. I mean I think history will hold that she went down as one of the strongest speakers in our history. She moved legislation with the help of the congressmen that pulled us back from a great depression. And here's the other part. She did everything that was asked of her on the legislative side with -- showing strength and integrity. And it wasn't her fault that other people didn't sell it properly.

(CROSSTALK)

KING: If it's not her fault going back, John Avlon, to Congressman Boyd's point, you studied the middle of America as well as anybody. You know you can't -- maybe you know look she didn't cause 9.6 percent unemployment. You can't blame that on the speaker. But she became the face. There was a new study out today, you know, upping the 75 million now, dollars in ads spent against Nancy Pelosi, 115 million against Barack Obama. Do they need a new face?

AVLON: They do. And this is actually going to be a very damaging decision for Democrats because it locks President Obama into going into the 2012 election with the same Pelosi/Reid/Obama (INAUDIBLE) that the Republicans used very effectively to pull Independent voters away from Democrats. And this is -- as a very effective speaker that's fine and she may be judged that way by history, so will Newt Gingrich.

But after Gingrich lost more seats than expected (INAUDIBLE) House just lost more seats in '98, he resigned. This is someone who has a 21 percent approval rating among Independent voters, Nancy Pelosi, 52 percent of all Americans have a very unfavorable opinion of her. Those are numbers that are a huge drag on a Democratic ticket. And that's just the reality. And to not deal with that is a major problem for the Democratic Party going forward.

KING: So Erick Erickson, you're the happy guy in the conversation at the moment then?

ERICKSON: Well you know who knows, the Republicans might reelect Michael Steele to the RNC --

(LAUGHTER)

ERICKSON: -- at that. You know ultimately, come 2012, I guarantee you I'll have a red state reader in every single district, going to every one of these moderate Democratic challengers, putting a camera in their face asking them will they back Nancy Pelosi to be speaker again. It's going to put them in a very awkward situation.

KING: And so we're talking about personnel here, Congressman. What about policy -- what about policy? You've tried to make a change in personnel or at least delay the election and personnel and you've failed. What is your recommendation now to the party? Where do you plant the flag and say no, we're going to fight until the end on this one? And where do you say, you know look, we just lost an election, maybe we need to move on this issue?

DEFAZIO: Well tomorrow, I'm going to the White House with a small group to talk to the president about our failed trade policy and say no more free trade agreements until we access and build a new --

KING: But that's the opposite of what the president thinks. The president thinks he has an opportunity --

(CROSSTALK)

KING: -- now to work with the Republicans in the Senate and get those.

DEFAZIO: Yes, he can do that and he can lose the election because the American people have turned against these failed free trade agreements. But back to the earlier point. Allen Boyd and I actually agreed we needed more real investment. If you can borrow money from the future, spend it on something that sends benefits to the future, which would be investment, transportation, infrastructure, education, schools, buildings, not these $8 a week tax cuts which were the brainchild of Larry Summers. And visible tax cuts people would spend, call it the (INAUDIBLE) Employment Act. It sure as heck didn't recover our economy. Huge mistake.

(CROSSTALK)

KING: It sounds to me like you think the president is leading not only the country, not leading the economy to a good future, but also not leading the party to a good future.

DEFAZIO: Well, I just say that our duty and what I think we failed in the House, some of us didn't, but some raised questions all along, was supporting the president and not pushing him to make him a better Democrat and more representative of the needs of people who wanted jobs and I think we could have done a better job there. We could have just said to the Senate, look, if that's all it is, we're not doing a stimulus. And things would have changed. We never took those tough positions like that. We facilitated what they wanted to do. We didn't stand up to it enough in my opinion.

KING: Let me go around quickly to the group before we lose our time in this block. A different message. The president has said that he thinks he had a marketing problem. He was right on the policy and didn't market it right to the American people. Congressman DeFazio clearly profoundly disagrees. John, to you first, who's right?

AVLON: If the president moves to the left, he fundamentally misread the election and it's the worst thing he can do. He needs to re-center himself in the mind of the electorate and (INAUDIBLE) the allegiance of Independent voters. He cannot move further to the left and win in '12.

BELCHER: It's not about moving left or right. Quite frankly, he's right in the center. You know who should be fired, not Nancy Pelosi, but quite frankly some of the people that were working at our party committees (INAUDIBLE) people time and time again who get these opportunities. It's time for some new fresh faces in those party committees, not Nancy Pelosi.

BASH: Mike Ross, a Democrat from Arkansas who saw many of his colleagues defeated around him said, look, the Republicans didn't win with just Republicans alone, Democrats didn't win with just Democrats alone. It was Independents who elected both of them, so Independents tend to be more towards the middle. If you believe someone like him, the president needs to listen to him --

KING: Erick, we were having this conversation about your party after the 2006 elections.

ERICKSON: Yes, in 2006 the Republicans said they had a messaging problem, sound familiar? Yes, this is what everyone says after one of these defeats. The problem is the president is now left with a Democratic Congress that is largely assigned to the coast to liberal on plays (ph) like San Francisco and there's going to be a lot of pressure for him to move to the left. And he's going to have a lot of people in his base say he's got to move to the left to get us back, but he really has to move to the right now.

KING: All right, John, Erick, Congressman DeFazio, thank you so much -- Cornell and Dana as well.

(CROSSTALK)

KING: A lot more to go in the program tonight. When we come back, we're going to talk to someone who's been missing from the national political debate for some time because of a personal embarrassment. Governor Mark Sanford of South Carolina one time a top Republican presidential contender then a personal failing. Does he have any regrets and what lessons can he teach us?

Also, we're going to talk to Dr. Drew Pinsky tonight. Sarah Palin's teenage children getting into a bit of trouble on Facebook. Is that a cautionary tale to parents of teenagers everywhere?

And "Pete's on the Street" tonight. You know Senator Rockefeller today said good-bye FOX, good-bye MSNBC. That's not going to happen of course, but why?

(COMMERCIAL BREAK)

KING: Welcome back. A lot of other political news to catch up on tonight. Senator Lisa Murkowski is claiming victory in Alaska's Senate race. Remember she ran as a write-in candidate after being defeated in the Republican primary by Tea Party favorite Joe Miller. Murkowski is now comfortably ahead as the write-in count nears completion and The Associated Press projects her the winner. Murkowski has an event tonight to declare victory, but Miller isn't conceding. He says his campaign might demand a recount.

On Capitol Hill, another day of questioning for the TSA chief about those full body scans and pat-downs at the nation's airports. John Pistole assured senators he went through the procedure himself before ordering it used nationwide.

(BEGIN VIDEO CLIP)

SEN. BYRON DORGAN (D), NORTH DAKOTA: Did it make you uncomfortable? I mean what was your impression as a person --

JOHN PISTOLE, TSA ADMINISTRATOR: Yes, yes, so it was more invasive than what I was used to.

KING: But the TSA chief says tight screenings are necessary and not all senators were critical. Senator Claire McCaskill said her knee replacement guaranteed pat downs until those body scanners were deployed.

SEN. CLAIRE MCCASKILL (D), MISSOURI: I am wildly excited about the notion I can walk through a machine instead of getting my dose of love pats.

KING: A new study of midterm campaign ad spending says $73 million were spent on ads targeting Speaker Pelosi. That's up from an earlier estimate of 65 million. She places second among Democratic attack ad targets. The campaign media analysis group report says more than $115 million was spent by Republican candidates, party organizations and independent groups on ads critical of President Obama.

And an appeal from Secretary of State Hillary Clinton today to Republicans blocking a Senate vote on a nuclear arms treaty with Russia. The new start treaty would reduce both nation's nuclear arsenals and U.S. inspections of Russian facilities were halted when the old treaty expired. GOP Senator Jon Kyl says he doesn't want to vote until next year. Secretary Clinton takes issue.

HILLARY CLINTON, SECRETARY OF STATE: Some have suggested we should hit the pause button, that it's too difficult to do this treaty in a lame duck session. I strongly disagree. This is exactly what the American people expect us to do.

KING: Senator Kyl says his concerns are legitimate but our Fareed Zakaria sees politics playing here. FAREED ZAKARIA, CNN CORRESPONDENT: The number we have at the end of the day which is enough to destroy the entire planet several times over, which is to say more than enough to defend ourselves and deter anybody else. This is turning into a political football because some Republicans in Congress simply don't want to give the Obama administration anything.

KING: Those are tonight's political headlines. When we come back, Governor Mark Sanford, Republican, of South Carolina, joins us live. He is out in San Diego for a big meeting of Republican governors. Having this conversation a little more than a year ago, he wouldn't be atop any list of Republican 2012 presidential prospects. Stay with us.

(COMMERCIAL BREAK)

KING: The Republican governors' conference out in San Diego is something of a last hoorah for its one time chairman the South Carolina governor Mark Sanford. Once mentioned as a possible 2012 presidential candidate, he's preparing to step out of the political spotlight after two terms as governor and six in Congress. Governor Sanford joins us now to go one on one. Governor, it's good to see you. We've known each other a long time. And we talked a few years back, look ahead to the 2012 presidential cycle. Back then, we didn't know anything about this thing called the tea party. And the tea party becomes this emerging force in the last campaign. And what is it about? It's about people who will stand up to wasteful spending. That has been your profile as governor, standing up against spending. Even your own Republican legislature at times getting angry with you, saying, let us spend a little more money, governor. At a time when we would think this could be Mark Sanford's moment, because of a personal failing, people don't think of you any more when it comes to national politics. That has to kick you.

GOV. MARK SANFORD (R), SOUTH CAROLINA: Well, that's life. I think that the bigger issue is the tea party phenomenon is alive and well and growing, and I think it's really about something beyond even spending itself, because I think the core of what has, you know, so many Americans out there generated in a political sense, as they are, is the real question about the American dream and real quick about opportunity going down the line and the real question about the basic fairness, which has been the glue that has held us together. When people looked at the stimulus or the bailouts, I think a lot of people thought folks were objecting to spending. The reason I stood out as I did, joined others in trying to fight against the stimulus packages, was at the end of the day, it was about something much deeper than even spending. It was about that basic notion of fairness or equity. And that if a little business made bad business decisions, they failed, they didn't understand how a big business could be protected from those same consequences that are part of the American dream. You take your bets but you live with those consequences that come as a consequence of that bet.

KING: I get your explanation there of the tea party movement of spending. But that's life? That's life? I mean, you're in a room, you're in a group of people who are among the most ambitious in the country, and in our politics. You yourself were clearly looking at this a couple years ago, thinking, would this be my moment, and then this comes along. Is that really how you view it? I guess I can ask it this way, are you so happy now in your personal life that presidential ambitions or politics is secondary?

SANFORD: Well, what I would say is this -- not going into the journey for me of the last 17 months, what I'd say is we all want to get to that spot and we're all on a journey. You're on a journey, I'm on a journey of how do you get to the spot where you truly removal self from the equation. I think that's the journey in faith, whatever its form. What I would say is ideally politics ought to be above and beyond any one personality. It ought to be above my ambitions. It ought to be above your commentary. So I would say what is important, and I think that I see this very, very clearly now, is -- is that the -- the sum total of those frustrations that people feel -- as you know, I've long talked about, for about 15 years in politics, on debt and deficits spending and you can't go on spending beyond that which you have or beyond your means, is generated a political force that I think is generally -- frankly very exciting in terms of what comes next, whether it's in the U.S. Congress or in the statehouses across this country.

KING: People who are watching at home seeing you on TV saying, wow, I haven't seen a lot of that guy, especially in a national interview format. One person they have seen more frequently in recent months has been your ex-wife. I want you to listen to something she said on "Good Morning America." She was asked if you were still seeing the woman who was at the center of all this. Listen to this.

JENNY SANFORD, GOV. SANFORD'S EX-WIFE: Sometimes I think it would be nice if he stayed with her because it would make it seem like maybe there was a reason for him to break the whole family up and go through all this but I don't know. It doesn't really bother me one way or another.

KING: Why are you so peaceful right now?

SANFORD: Again, I'll talk politics with you all night long. I have not talked for the last 17 months on my personal life and I'm not going to start now. What I would say is I think that what we're all after is that larger journey of getting to that spot where we go beyond self. I'm just saying I'm on that journey. I'm fairly far along the way. Got still a long way to go. I don't know where you are. I don't know where other listeners are out there. But I keep going back to the basic point of the 15 years that I have spent in politics has been about we cannot -- this republic cannot survive.

We will go the way of the Romans if we continue to go on spending beyond our means. We have about $100 trillion of accumulated debt. When you add up state and local liabilities. When you add up all the different promises that are out there, we're over the $100 trillion mark now. We are at a very precious crossroads in terms of the sustainability of our Republican. And what happens with these governors that are gathered here in San Diego will be part and parcel. What happens in Congress next is going to be part and parcel to saying, are we going to go back to the things that made this country great in the first place? Or are we going to continue down a path that guarantees trashing of the currency, elimination of the American dream, and, frankly, a real squandering of a whole lot of opportunities a lot of folks worked very, very hard to accumulate over the last 200 years. I'm gathered here with other Republicans to talk about ideas that are awfully important in terms of opportunity and the future of this country.

KING: As you talk about those ideas and future of the country, is this the last chapter in elected politicians for Mark Sanford? People wonder if Lindsey Graham, the Republican senator, will run for another term. The other Republican Senator Jim DeMint has term- limited himself, saying he will only run for two terms. And they look at Mark Sanford, thinking he will seek another seat, is that a possibility, sir?

SANFORD: I wouldn't rule anything in or anything out. I don't think it's where I'm headed in life. It's certainly not my plan at this point. What I've learned, particularly given the last chapter of my life is there are a lot of things that will surprise you in life and you take them as they come. What I would say is -- is there is amazing grace with people across this country and certainly people across my state, and we've had a most productive last couple months of my time in office. And for that time, I'm most grateful. We're able to pull off some reforms, many of which we've been working on for the last 7 1/2 years. So I'll worry about what comes next politically tomorrow. But, again what I'm gathering on here and discussing ideas with other governors and governors-elect, again, is that bedrock of what of the choices we are going to make now, specifically with regard to the financial policy, with regard to school scholarships, with regard to a whole host of things that will make a difference in people's lives. I would take Chris Christy, what's happening in New Jersey, I take the new election of Rick Scott, happening down in Florida, as barometers as to what may come next.

When we come back, Sarah Palin's teenagers getting into a little trouble on Facebook. We'll talk to Dr. Drew Pinsky about lessons for all parents.

(COMMERCIAL BREAK)

KING: Welcome back. Let's get right to Joe Johns. He's here with a big headline on a major prosecution of an alleged terrorist.

JOE JOHNS, CNN CORRESPONDENT: A surprising verdict this evening in the case of the first Guantanamo detainee tried in civilian court. A New York federal jury acquitted Ahmed Ghailani of all but one of the 285 charges he faced in connection with the 1998 U.S. embassy bombings in Kenya and Tanzania. The single guilty verdict, conspiracy to destroy government property, with a penalty of 20 years to life. Usually the government has a pretty good record, something like 91% conviction rate.

KING: This one case is going to be the starting point for reigniting the debate over Khalid Shaikh Mohammed and the other 9/11 co-conspirators and whether they should be tried in military tribunals or courtrooms. Senator Lindsey Graham already saying tonight going forward, I once again strongly urge Obama administration to use military commissions to prosecute enemy combatants, particularly the 9/11 conspirators. So one verdict in New York, big political debate in Washington. Joe Johns, thanks.

When we come back, do you have teenagers? Do they go on Facebook? Lessons perhaps today from the Palin family.

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KING: The ratings are good but some critics have not been kind to Sarah Palin's new reality show including an Alaska teen who posted his bad review on Facebook. What came next is a new political controversy for the Palin family and a cautionary tale to parents of teenagers everywhere. Here with us to sort this out is Dr. Drew Pinsky. He is the host of "Celebrity Rehab" and "Loveline." On the one hand, Willow and Bristol Palin are being loyal to their mom which is to be applauded. But I want you to read the Facebook posting reportedly put up by Willow Palin, 16 years old after this young man Tre posted a critical review of the program. "Haha you so gay. I have no idea who you are. But what I've seen pictures of, your disgusting." In a later posting she said this, "Tre, stfu," a not polite way of saying be quiet. And then went on to say what most would consider an anti-gay slur. At a minimum it's very insensitive, maybe going beyond that, bigoted and homophobic.

DR. DREW PINSKY, HOST, "CELEBRITY REHAB" AND "LOVELINE": Well yes I mean look, the comments I'm sure she's regretful of having made. It's a 16-year-old acting impulsively. I see two sides to what happened here. One is that young people being the subject of such intense aggression and scrutiny through social media has got to be overwhelming. I know you must have a twitter site or Facebook and I imagine you and I both get our share of negative press. We're just sort of relatively well liked. Imagine you're the child of a lightning rod, a controversial figure like Sarah Palin, and they must get inundated with horrible, hateful material, that middle adolescent is just not equipped to manage. So now she has an aggressive outburst and used language that is unacceptable but unfortunately common place among adolescents today. The word she specifically used, they're actually not referring to homosexuals. Unfortunately, if you're a homosexual, those are hateful words. This is something I'm sure those kids are being talked about right now. But just an unfortunate situation, it seems to me.

KING: Bristol Palin did follow up. She wrote, Willow and I shouldn't have reacted to negative comments about our family. We apologize. On a nicer note, thank you for supporting the great competition on "Dancing with the Stars." She is in the middle of an even higher profile now because of that. Let's focus on that for a minute. They're the teenage children of somebody who is in the middle of this fierce and sometimes nasty national debate.

PINSKY: Right, is that okay? And, again what we're seeing is not just that, but with the advent of social media, these kids are exposed to that aggression. Now, Bristol's an adult. Bristol -- I've worked with Bristol, she's a lovely young woman. Willow is a child effectively. If I were the father, I'd take her off social media because there's no way to protect her from the aggression that's going to rain down on her unless they can sort of close out the outside world. And I know myself, whenever my children are exposed to scrutiny or negative because of myself living a public life, it's unpleasant. You can't imagine how guilty you feel. But that's the world we live in right now. By the same token, if my children say, ever use language like that, I would feel responsible for that. So I'm sure Sarah Palin feels -- I hope she responds to this because it is -- the language is just not okay.

KING: To that very point, I have two teenagers, a 17 year old boy, a 14 year old girl. It is much more frightening than anything I do professionally, trust me. Where is the line? You want your children to be independent. You want them to take advantage of this remarkable new technological revolution. And yet you, a, you're still responsible for them and, b, it's dangerous out there.

PINSKY: I think that the line is right there, that you have to be supervising what they do and if you have a public life -- we're really not talking about the average person here but you want to contain what they're exposed to. That's what the internet is, vast exposure, that we're finding more and more is harmful to young people. We really don't know the full impact of not just social media but all the material that rains down on young people. This is one slight example. I think the reason it's made news is not just it's Sarah Palin but, again, the language she used. You don't have to go further than "South Park" to hear the casual nature that that language is thrown around. It's something we have to figure out as a society here because that word -- those words, they hurt homosexuals, they do. I know people use those words aren't referring to that, but, look we have to find a new word. We have to figure something out here because this is just not okay.

KING: Our thanks to Dr. Drew Pinsky. When we come back, Pete's out on the street tonight. We'll analyze comments by Senator Rockefeller essentially saying he wishes Fox and MSNBC would go away.

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KING: I need some help from my friend, our off-beat reporter Pete Dominick. Remember Rockefeller of West Virginia, earlier today, I guess he was just waxing for the good old days. He apparently doesn't like all his choices in cable news. Listen.

(BEGIN VIDEO CLIP)

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: There's a little bug inside of me which wants to get the FCC to say to Fox and to MSNBC, out, off, end, good-bye. Be a big favor to political discourse, our ability to do our work here in Congress. (END VIDEO CLIP)

KING: All right, Pete, you get the point. Pete, what's this senator getting at here?

PETE DOMINICK, CNN CORRESPONDENT: First of all, the new most in demand popular guest on both those networks has a point. I agree with him. It would be great for us at CNN if we got rid of the competition. I would take it a step further. Forget about the 24- hour news media. What about the reality shows? You were just talking about Sarah Palin's reality show. Get rid of all those. Those are really causing the damage John, I long for the "Family Ties" and "The Facts Of Life," those shows that showed us what the family could be. Not getting voted off the island. Come on, you know what I'm talking about.

KING: I used to like the old original "Star Trek," then I used to watch a little "Monty Python." That's not news. And Keith Olbermann actually got back at the senator actually making a valid point, that the FCC does not regulate cable.

DOMINICK: There's nothing that can be done about that. It's all what we want. The viewer.

KING: I want Pete Dominick, I don't fear competition, we'll see you tomorrow, my friend. We hope to see you as well. That's all for us tonight.